FED:Sonic reaffirms full year profit guidance

Sonic Healthcare has reaffirmed its full year profit guidance of 5 to 15 per cent growth as its Australian pathology volumes return to long-term trend levels.

Profit after tax would rise to as much as $317 million from the prior year's $293 million, assuming financial year 2010 exchange rates and excluding new takeovers.

Sonic said in slides accompanying the chief executive's speech to the annual general meeting on Thursday that earnings in 2010/11 would be strongly weighted to the second half, which was when Australian pathology operations were likely to recover.

An unexpected five per cent cut in funding for test fees by the Australian federal government in November 2009 had hit revenue for all medical diagnostics companies, Sonic chief executive Colin Goldschmidt said.

"These changes were compounded by a simultaneous fall in market demand, possibly triggered by publicity surrounding mooted patient co-payments for laboratory tests or by lower GP consultation rates," Dr Goldschmidt said on Thursday.

Sonic independent director Peter Campbell said the company's expansion into Europe and the US had delivered strong growth and increased profits in 2010.

"Having invested heavily in building significant operations in Western Europe and the US over the last few years, we have now achieved critical mass and the return on that investment is starting to accelerate; through synergy capture and other cost initiatives," Mr Campbell said.

Shares in Sonic Healthcare had risen 49 cents, or 4.58 per cent, to $11.20 by 1438 AEDT.